ETHICAL LENS

CIMA ROUNDUP OF RESPONSIBLE BUSINESS ISSUES - FEBRUARY 2015

1 · www.cimaglobal.com/ethicallens

IN THIS ISSUE

Changes to the CIMA Code of Ethics

New Code of Ethics for CGMAs

Are ethics and profits compatible?

2014 Corruption Perception Index

Modern slavery on an upwards trend

ETHICS ARE IMPORTANT TO ME BECAUSE...

‘…in a volatile, uncertain, complex and ambiguous environment, it is simply not possible to create the manual that tells us what to do in every situation. An ethical culture is the essential ingredient that enables organisations to empower their people to take the right decisions that will build both long-term resilience and trust.’

Gillian Lees,

Head of Research and Development

2 · Ethical Lens

NEWS

Changes to the CIMA Code of Ethics, and

introducing the Code of Ethics for CGMAs

CIMA has updated its Code of Ethics. In order to ensure that it remains

relevant and reflects the changing dynamics of the profession, the Code

has been reviewed and some sections updated. The changes were

introduced with effect on 1 January 2015.

CIMA and the AICPA have released a CGMA Code of Ethics. The CGMA

Code is a non-authoritative document and is consistent with Part C of

the CIMA Code. Any CIMA member in compliance with the CIMA Code

is also in compliance with the CGMA Code.

Access the CIMA Code and guidance online, and for CGMAs who wish

to see the CGMA Code, visit www.CGMA.org/ethicscode.

» www.cimaglobal.com/ethics

REPORTS & EVENTS

CGMA Ethical Performance briefing

A 2014 survey of CGMAs around the world found that

business leaders are increasingly recognising the need for

ethical performance, and its impact on the bottom line.

The way in which these practices are embedded and

implemented is critical to organisations’ ability to gain the

most from an ethical culture. Businesses are struggling to

move from tick box compliance to truly embedding an ethical

culture across the organisation.

There is a clear deficit in three areas: communication,

leadership and training. Read the briefing and find out how

CGMAs can help embed an ethical performance culture.

» Access the briefing

Sustainability initiative from

CIMA and UN Global Compact Sri

Lanka

In September CIMA, together with the UN Global

Compact Sri Lanka network, called for submissions to

the annual ‘Hand in hand’ sustainability initiative. The

competition aims to engage students and their

educational institutions in understanding the importance

of social, economic and environmental development

stemming from the ten Principles of the UN Global

Compact.

Nine shortlisted applicants were invited to present their

projects in front of four sustainability professionals in

November. Congratulations to the winning project from

team Canfi at Wisdom Business Academy.

» Find out more about the initiative

February 2015 · 3

Student e-tool remains relevant under

the 2015 syllabus

In time for the start of computer based exams and the 2015

syllabus to take effect, CIMA has updated its ‘Student ethics

support’ e-learning tool. The tool has been reviewed to

remain relevant under the 2015 syllabus, and new questions

from the 2015 practice exams have been added.

Relevant to all students, at any part of their studies, this tool

explains everything from the basis of business ethics to how

ethics are approached in CIMA exams.

The Ethics CPD e-tool is another excellent way to refresh

your ethical decision making skills and ensure that you

consider all necessary steps (see the Ethics Checklist) when

facing an ethical dilemma.

» Access the ‘Student ethics support’ e-tool and the ‘Ethics

CPD’ e-tool

CGMA Integrated Thinking

briefing

The CGMA Integrated Thinking briefing explores how

Integrated Reporting can help drive competitive

advantage. Traditional reporting has not kept pace with

the seismic shifts across today’s complex economic

environment, in which 80% of an organisation’s value is

in intangible assets.

Effective integrated reporting has a number of benefits,

the foremost which is to create integrated thinking

across the organisation; through a firm focus on

strategy, business model and value creation it helps to

break down silos, reduce duplication and create greater

cohesion and efficiency. By providing a broader and

more relevant view of the organisation on which to base

investment decision making it also promotes a longer-

term investor base.

» Access the Integrated Thinking briefing

IFAC

Latest reading from the IFAC Global Knowledge

Gateway

The IFAC Global Knowledge Gateway provides insights, ideas and information from

around the globe, related to ethics, governance, sustainability and a range of other

areas. You can find out more about the Gateway in this short YouTube animation.

Latest on the Global Knowledge Gateway read about the top five fraud headlines for 2014, brief yourself on the ins and outs of business ethics at the Institute of Business Ethics’ Frequently Asked Questions, and access a Deloitte article about the importance of, and how to implement, a tone from the top.

» Visit the IFAC Global Knowledge Gateway

4 · Ethical Lens

REPORTING

Effectively communicating

sustainability to investors

A 2014 Accenture and UN Global Compact report found that

88% of investors surveyed see sustainability as an opportunity

for competitive advantage, and 91% believe that sustainability

should be better embedded in discussions between

companies and investors. Yet it found there is a disconnect

between CEOs’ and investors’ perception of how well

sustainability issues are measured, reported on and

integrated into wider discussions.

A recent LNS Research analysis lists five key steps for a

successful sustainability report. The top three tips include

focusing on metrics and accomplishments, appointing an

executive owner of reporting, and mapping the report

structure to reporting requirements.

» Read the full fop five list for producing a successful

sustainability report

IIRC year in review

Go on a virtual journey of the key developments and

accomplishments of the IIRC from launching the Pilot

Programme in 2011 until December 2014. Watch

interviews, read <IR> Framework guidance documents,

access a sample of reports by pilot organisations, and

find out how external bodies have responded to <IR>.

» Visit the virtual IIRC yearbook and access their

resources

Mandatory sustainability reporting a

growing trend

In South Africa sustainability reporting is mandatory for listed

companies, and in the EU it was decided last year that larger

organisations will have to report on this as well.

Recently the Singapore Stock Exchange confirmed that

sustainability reporting will be made mandatory for listed

companies in the near future. The Taiwan Stock Exchange

and the Financial Supervisory Commission have also recently

announced that sustainability reporting will made mandatory

for listed companies in specific industries. It will be interesting

to see who else follows suit in the year to come.

» Find out more about sustainability reporting from the Global

Reporting Initiative

Integrated reporting from concept

to practice

A growing number of organisations around the world

are delivering integrated reports. They are now facing

the challenge of how to produce a meaningful and

useful report.

South Africa has a long history of integrated reporting

and today, although only listed companies are required

to produce one, other large organisations are also

beginning to publish integrated reports. In ‘Integrated

reporting in South Africa – from concept to practice’

organisations share their experiences, what works and

what doesn’t , as well as providing an excellent

overview of how integrated reporting has developed in

the country over the years.

» Read ‘Integrated reporting in South Africa – from

concept to practice’

February 2015 · 5

RESPONSIBLE BUSINESS

Modern slavery and corporate

responsibility

According to UK Government and UN statistics, modern

slavery is on an upwards trend. Global organisations such

as the UN and OECD, as well as many employers and

national governments are now trying to establish what the

responsibilities of businesses are. Britain’s Modern Slavery

Bill will require larger companies to publish an annual

slavery and human trafficking statement. Similar legislation

will be implemented in the EU in 2016.

The corporate law firm Eversheds argues that not only

should organisations have human rights policies, speak up

lines and training for key staff, but that ethical

responsibilities should extend to suppliers. The International

Labour Organisation (ILO) reports that an estimated 21

million people worldwide are victims of forced labour.

» Find out more about forced labour and modern slavery at

the ILO website

Ethical dimension of taxation

At the 2014 G20 Leaders’ Summit in Brisbane, the body

released new commitments to collect information on the

beneficial owner behind anonymous companies and

trusts. In relation to the G20 meeting, Newsweek

published an article highlighting that ‘the amount of

money stolen from developing and transition countries

and hidden in foreign jurisdictions totals an estimated $20

billion to $40 billion each year’.

PwC’s global chairman recently commented on the moral

dimension of taxation in Financial Times. Professional

services firms must remember their ethical

responsibilities when advising clients on tax, especially,

the chairman noted, because many national tax laws are

becoming dated and haven’t kept up with globalization.

» Read the full Newsweek coverage of the G20

commitments to tackle tax evasion

Need for businesses to improve

supply chain management

Back in December in the UK, we read in the news about

Premier Foods’ ‘pay to stay’ scheme, where payments

were requested from suppliers for continued business.

This hit many small suppliers hard. A poll by the

Federation of Small Business found that one in five small

businesses has faced ‘supply chain bullying’.

Supply Management magazine reports that one fifth of

businesses don’t have ‘any financial information about

main suppliers before awarding contracts’. This finding

comes from a survey by the business information

provider Achilles. The survey also found that only 39% of

businesses perform anti-bribery and corruption audits on

their suppliers, and that information provided by suppliers

is not always checked.

» Visit SEDEX for more information about ethical supply

chain management

6 · Ethical Lens

Study finds most bribes paid in

wealthy countries

A 2014 OECD study of 400 multinational organisations over

15 years shows that ‘most bribes were paid in developed

countries and with the full knowledge of senior

management’. Management level employees authorised or

paid the bribes in 41% of cases, compared with senior

executives being involved in 12% of cases. Further, the

survey found the average bribe cost organisations almost

$14 million, and generally measured around 11% of the

value of the transaction. Find out more in the Guardian.

CIMA offers anti-bribery information and UK Bribery Act

guidance online – download our new leaflet for an overview.

» www.cimaglobal.com/bribery

2014 Corruption Perception Index

The 9th December marked the 2014 anti-corruption day.

Transparency International (TI) reported about celebrations

across the world. TI recently also released the 2014

Corruption Perception Index. The Scandinavian countries

and New Zealand still find themselves at the top of the list,

followed by Singapore (7), ahead of both the UK (14) and

the US (17). Botswana, the cleanest of the African countries

according to this index, keeps its rank ahead of countries

caught up in the euro-crisis, including Portugal, Spain and

Greece.

» Find out about perceived corruption in your country with

the Corruption Perception Index

Are ethics and profits compatible?

Tania Hayes, head of conduct and compliance at AAT,

has written an excellent article for Accountancy Age

about business ethics. Referring to some recent UK

cases, including Tesco’s £263m mistake in 2014, she

points out the importance of an accountant’s duty of

‘professional scepticism’. Tesco and the many other

organisations that covered the front pages in 2014

showcased that ethics are an essential part of any

business’s sustained profitability. She reminds the reader

that employees mustn’t be judged merely on their profit

margin, but also on how they got there – ensuring no

ethical standards were compromised along the way.

» Read the Accountancy Age article

2025 Sustainability issues

The ACCA, together with Accounting for Sustainability

(A4S), asked 5,000 ACCA students about future

sustainability issues for business. 81% of respondents said

that natural resources will be an important sustainability

challenge for businesses in the next 10 years. Second, at

70%, was population rise, followed by instability in financial

markets at 67%. Decline in natural resources was a

prominent issue mainly by respondents in the Caribbean,

Africa and Asia Pacific. Respondents who saw sustainability

issues as important in their current role were mainly from

Africa and Asia.

» Read the findings in full on the ACCA website

‘Finance professionals through their analysis and forecasting can make the business more sustainable. Resource utilization is a key issue as of today’s environment and will be an even bigger issue in the future where resources would be more scarce than now.’

Respondent to the ACCA / A4S survey

February 2015 · 7

Corporate social investment in South

Africa

An annual survey on Corporate Social Investment (CSI)

from the consulting company Trialogue reports that South

African businesses are now investing in ‘fewer, but more

meaningful’ CSI projects over a longer period of time.

The survey found that South African companies spent an

estimated R8.2bn on CSI investments, a 2% decline

compared with 2013. This is the first time in the 17 years

that Trialogue has run the survey that spending in CSI has

shrunk. However, it is noted that the slight decline could be

due to better corporate reporting, rather than less

investment.

» Read more in the article from Business Day Live

Global whistleblowing trends

The Business Times Singapore reports that although the

importance of whistleblowing as a corporate risk

management policy is increasingly recognized by

Singaporean firms, they are slow to put theory to practice.

The study, by the international law firm Freshfields

Bruckhaus Deringer, showed that 24% of the over 2,500

senior and middle managers asked said their companies

did not have a whistleblowing policy in place.

Meanwhile a new whistleblowing service is launched in Africa. ‘Africaleaks’ is designed to securely connect whistleblowers with media organisations across Africa. It differs from Wikileaks in that information is not published on the site itself, rather individuals are enabled to share their leads via encrypted emails, supporting their safety.

» Find out more whistleblowing trends for 2014 and 2015 at the CGMA blog

8 · Ethical Lens

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MORE FROM CIMA ETHICS

Ethics Checklist

CIMA has released an updated version of

its ethics checklist. Download the checklist

or access the inforgraphic online.

» www.cimaglobal.com/ethicschecklist

Anti-bribery guidance

CIMA has extended its anti-bribery

guidance. Visit the website for more

information around anti-bribery, the UK

Bribery Act and FCPA. For an overview,

download our bribery leaflet. This

guidance is relevant to anyone working in

business, so please do share with

colleagues who may not be CIMA

members or students.

» www.cimaglobal.com/bribery

HELPLINES AND SUPPORT

Global Guidance Line

This service, aimed at CIMA members and students

outside the UK, allows the caller to discuss a concern

and get help to decide next steps and other potential

areas of support. This is not a substitute for technical

or legal advice. Operators speak multiple languages,

the service is available 24/7, and the caller will remain

anonymous.

CIMA Ethics Helpline

This free confidential helpline offers ethical guidance

and assistance with applying the Code of Ethics,

available to all CIMA members and students.

UK Legal Helpline

LAW Express - for CIMA members and students in the UK and

Europe. This service gives access to information online at no

charge, and a low cost professional legal advice phone-line.

Find information about CIMA’s helplines and support at

www.cimaglobal.com/helplines

Access the Code and all ethics resources at

www.cimaglobal.com/ethics

Alternatively, send your ethics query in an email to

ethics@cimaglobal.com